The role of ownership in determining the rural economic benefits of on-shore wind farms: A CGE analysis

The development of the wind energy sector is often promoted as means of supporting rural economies. This paper examines the impact of on-shore wind power on a regional economy, focusing in particular on how ownership structure (external, farmer or community) affects the size and distribution of impacts within the rural part of the region. Empirical analysis is based on a regional CGE model of North East Scotland with the results compared to those generated from a standard SAM multiplier analysis. With no local ownership, while rural GDP increases, there is almost no effect on household incomes due to the limited direct linkages of the on-shore wind sector. Local ownership increases the household income benefits but there are still limited positive spill-over effects on the wider economy unless factor income is re-invested in local capital. With re-investment, farm household ownership gives rise to the largest increase in total household income but community ownership gives rise to the largest increase in rural (non-farm) household incomes and welfare. The results add to the ongoing debate about the opportunity cost of external asset ownership in rural areas.